Correlation Between Urstadt Biddle and Firm Capital

Can any of the company-specific risk be diversified away by investing in both Urstadt Biddle and Firm Capital at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Urstadt Biddle and Firm Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Urstadt Biddle Properties and Firm Capital Property, you can compare the effects of market volatilities on Urstadt Biddle and Firm Capital and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Urstadt Biddle with a short position of Firm Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Urstadt Biddle and Firm Capital.

Diversification Opportunities for Urstadt Biddle and Firm Capital

-0.69

Correlation Coefficient

Urstadt Biddle  Firm Capital

Excellent diversification

The 3 months correlation between Urstadt and Firm is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Urstadt Biddle Properties and Firm Capital Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firm Capital Property and Urstadt Biddle is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Urstadt Biddle Properties are associated (or correlated) with Firm Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firm Capital Property has no effect on the direction of Urstadt Biddle i.e., Urstadt Biddle and Firm Capital go up and down completely randomly.

Pair Corralation between Urstadt Biddle and Firm Capital

If you would invest  2,274  in Urstadt Biddle Properties on October 10, 2024 and sell it today you would earn a total of  0.00  from holding Urstadt Biddle Properties or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	4.55%
Values	Daily Returns

Urstadt Biddle Properties  vs.  Firm Capital Property

Urstadt Biddle Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Urstadt Biddle Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental drivers, Urstadt Biddle is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Firm Capital Property

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Firm Capital Property has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Firm Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Urstadt Biddle and Firm Capital

The main advantage of trading using opposite Urstadt Biddle and Firm Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Urstadt Biddle position performs unexpectedly, Firm Capital can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Firm Capital will offset losses from the drop in Firm Capital's long position.

The idea behind Urstadt Biddle Properties and Firm Capital Property pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.